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Dáil Éireann díospóireacht -
Thursday, 9 May 1940

Vol. 80 No. 2

Committee on Finance. - Resolution No. 14—General (Resumed).

Question again proposed:
"That it is expedient to amend the law relating to customs and inland revenue (including excise) and to make further provision in connection with finance."

The Minister, towards the end of his Budget speech yesterday, expressed great pleasure at his wonderful achievement and, evidently, that pleasure was supported and appreciated by the backbenchers of Fianna Fáil, because they thought it deserved applause. It may be felt by some people also that because of the fact that there is no new imposition of taxation the Budget is a good one. Nevertheless, if we are to examine what the Budget really means for the country, we must examine it from the point of view of what is the aggregate amount of taxation required by the Minister at the present time, and how it compares with previous years, and of the trend taxation is generally taking in this country. The figure asked for in the Budget is, approximately, £35,500,000 and, there is no doubt about it, that is an appalling sum of money for this relatively poor country to find in any year, particularly in view of the difficulties we have to face in the present year. The Minister himself referred to the steady and relentless growth of expenditure, and expressed his concern with the increase in expenditure. He told us that he set up an economy committee last year which he thought might effect economies to the tune of about £400,000, and he admitted that the work of that committee has now proved to be a failure, and that little or no economies have been effected as a result. Of course, at the end of his statement, he pointed out the necessity of expanding our production here in this country, particularly our agricultural production. I want to say that if there is really any sincerity or any anxiety on the part of the Minister and on the part of the Government to help to increase agricultural production in this country, the best way in which that can be done is by lowering those burdens of taxation that are crippling the agricultural industry at the present time. We have been pointing out here at every possible opportunity that one of the main reasons why we have not a prosperous agriculture in this country is that our agricultural people cannot possibly bear the present burden of taxation that is being ruthlessly imposed on them by the Government.

Some Deputies on the other side have expressed their anxiety as to the present position, notably Deputy Childers. I have listened to Deputy Childers with a good deal of attention, and he certainly is entitled to great credit for the way in which he has amassed a pile of statistics, giving very useful information, comparing our agricultural production with the various competitor countries. Although Deputy Childers did not say so in so many words, there was a suggestion by innuendo that he felt it was the responsibility of the agricultural community themselves, that we were probably lazy and not prepared to put the necessary energy and enterprise into our work to effect that improvement that has been achieved in other countries.

I must say that when he was questioned by Deputy O'Sullivan on that, he said that that was not his intention but, at the same time that was the impression that was conveyed to me. I felt that he had a good deal of contempt for the agriculturists in this country, that they had failed to put their back into the job and that it was they alone that were responsible for the present situation in our agricultural industry. I can only say that it is a pity that Deputy Childers had not to make his living on a farm in this country during the past eight or nine years. If he had, he might not have adopted the same attitude as he did here this evening.

Deputy Childers went back and traced the history of agriculture in this country as compared with other countries since the beginning of the century. He tried to prove that agricultural output in this country has not improved to any appreciable extent over that period. He was very anxious to concentrate on the period of office of the predecessors of the present Government. He tried to tell us that although we here talk a lot about agriculture, when our people were in office no real improvement was effected in agriculture in this country. I do not agree with that at all and I do not think he gave us any figures to prove that. We must bear in mind one very important consideration: During that period the world was gradually slipping into a very deep trough of depression that reached bottom about 1929. Taking that into account and considering that most countries suffered very severely as a result of that depression, comparatively speaking, we weathered that depression and fared fairly well, very much better than most of our competitors.

In regard to the many points he has discussed here this evening, I would like to tell Deputy Childers that the late Minister for Agriculture was rather keen on developing agriculture along those lines. Deputy Childers spoke about the cultivation of grass in New Zealand and about the amount of artificial manures that was distributed on the North Island in New Zealand annually. I suppose we cannot blame Deputy Childers for not having a particular knowledge of this, but prior to the present Government coming into office we were carrying out quite a lot of experiments in the cultivation of grass and rotational grazing in this country. We were anxious to develop a better system of grazing, to get the best results from grass, to promote early growth, to hold up certain divisions of farms so that we would have early production of grass. A number of experiments was carried out and the farmers were advised along those lines. They were advised to carry out a system of rotational grazing and in the matter of dressing our grasslands. While that was going on we had a political Party in this country that was decrying that system of agriculture and was calling in derision the late Minister for Agriculture the "Minister for Grass." Now we have a man who is studying agriculture from a scientific aspect, coming into this House to tell us that that system is working admirably and talking about the phenomenal increase in agricultural production in New Zealand because agriculture has been worked along those lines.

Speaking as a practical farmer, I do not think that we could ever effect the vast improvement in production that has occurred in New Zealand over that period, because there is no analogy between the two countries at all. New Zealand was a semi-undeveloped country at the beginning of this century. It has a wonderful climate. You might say there is no winter there at all. It is a country which enjoys beautiful climatic conditions; it is very fertile, and has a small population. Naturally, with all the opportunities there for development, agricultural production has increased. We were an old country, developed to a very large extent, and there was not the same possibility for development here over that period, but there is no doubt about it, that a good deal could be done for the development of agriculture.

One of the points particularly referred to by Deputy Childers has been stressed over and over again from these benches, that is, the liberal use of artificial manures on all our soils, irrespective of whether they are in cultivation or in grass. One is equally as important as the other, and we have often said here that artificial manures should be available to the farmer at such a price that he would not spare them, and that he would be prepared to spread them liberally over his land. What was the position here? Under the policy pursued by the Government when they came into office, artificial manure manufacturers in this country were prepared to manufacture the basic manure, superphosphate, at a competitive price in respect to imported manures. There was immediately clapped on a tariff of 33? per cent on all imported manures, with the result that the manufacturers here naturally formed themselves into a ring and pushed up the price to a point just below the level of the protection afforded. The result is, from my experience as a farmer—and I say it without any hesitation—that there are scarcely any people I know who attempted to dress grass lands in this country during the last eight or nine years.

Is there not a difference of opinion among experts as to the value of artificials?

There are artificials and artificials.

Is there not a difference of opinion among experts as to whether artificials are so beneficial?

None whatever.

An English expert was asked quite recently on the wireless whether there was anything in the opinion very frequently expressed that artificials, by forcing the soil, did eventual harm to the soil, and he said he had an open mind on the subject.

He would have no open mind about it if he were a practical man and had used artificials for a period of years. Are we to assume that he is the only wise man in the world?

In my experience in the country, it was always a subject of contention.

Are we to conclude that the agriculturists of all the countries in the world are fools and that this is the only wise agriculturist alive to-day?

In my experience in the country, it was always a matter of contention.

There is not the slightest doubt about the beneficial effects of the use of artificials, judging by results.

And by experts, too.

And by experts, who form their opinions on results because it is only by experiments over a period you can prove a case.

Even Deputy Childers takes that view, and Deputy Moore need not go any further.

The use of artificial manures has produced very beneficial results. It improves the fertility of the soil——

Has the Deputy not often found——

Let the Deputy make his own speech.

There is never any objection to a question.

I do not object to a question. What is the Deputy's question?

Has the Deputy not often found that opinion amongst farmers?

Never amongst good farmers.

It was always so, in my time, anyway.

Deputy Moore does not, apparently, know the difference between certain artificial manures and other artificial manures. Some are stimulants, while others are manures.

I suppose that some are artificial artificial manures.

Five or six Deputies have spoken. Deputy Hughes is in possession.

I do not object at all to Deputy Moore's question, but I gave him credit for more wisdom than to doubt the benefits of the use of artificial manures.

I did not express any opinion of my own.

He expressed his ignorance.

I think the Deputy is simply trying to throw a bone of contention into the debate and that he knows very well that there can be no doubt about the good results. Otherwise, every agricultural country in the world would not be so foolish as to spend millions of pounds on artificial manures and even his own Government, in which he has explicit faith, is going to give £100,000 subsidy for the use of artificial manures——

Mr. Brennan

But there are no artificial manures available.

——when it is nearly too late and when we cannot get them. And when, some six or seven weeks ago, there was a danger of a shortage, we had to press on the Minister for Supplies and the Minister for Agriculture the necessity of extending that subsidy to imported artificial manures. There is one matter on which we have always disagreed fundamentally with Fianna Fáil, that is, the necessity of protecting agriculture but not in the sense in which Fianna Fáil talks about protection. It is possible to afford protection by putting on tariffs, but the tariffs which have really been most injurious to agriculture are those which have been given to people who have started any and every type of industry here, without any regard for the effects they may have on our major industry. Deputy Childers, who now bewails the agricultural position of the country, lent a helping hand in the starting of industries which were in no way beneficial from the national point of view and which threw back very serious burdens on the agricultural community.

We must always bear in mind the fact that we, as agriculturists, are producing a commercial article, and that, by reason of modern transport facilities and modern methods of production, the use of tractors, and so on, in countries with bigger areas than we have, competition has made the price of agricultural produce so very keen to-day that the introduction of anything which may affect the cost of production has the effect of destroying production. That is what has happened in this country, and that is what is happening up to the present time. Difficulties have been introduced, and the tariff weapon has been used by the Government in such a manner as to increase the cost of production of the agricultural community and retard agricultural production. In other words, there is a definite clash of interests between industry and agriculture here, and it has been ignored all the time.

These loads, these burdens and these difficulties have been thrown back on our agricultural people, and, naturally, having over and over produced an article which results in no profit, the farmer's morale has been broken to such an extent that he is not inclined to try any further. The situation is really serious, and I agree with Deputy Childers that it is a grave situation that agricultural production has not shown that resiliency, that tendency to improve, since the settlement of the economic war. The reason is that the entire resources of agriculture, the financial resources and courage of our people, have been broken to such an extent that they are not inclined to try, and are not putting their backs into their work as they should. Firstly, they are handicapped financially, and secondly, the experience of the last seven or eight years has broken their courage. There is no use in Deputy Childers seeking to find the reason for that state of affairs amongst our agricultural people. Let him look to his own Party and to the present Government. They alone must shoulder the full responsibility for the present state of agriculture.

To get back to the Minister's statement on the Budget, one thing that would help agriculture would be to reduce the burden of taxation. It has been said, inside and outside this House, that the country is groaning under these excessive burdens and that you cannot hope for an improvement in production while that continues. The Minister said that orthodoxy had no appeal to him, and that he had used unorthodox methods while he was Minister for Local Government. We admit that he used unorthodox methods, that he mortgaged the future to provide housing and to finance other schemes for the last seven or eight years. That is what he is doing also in this Budget. He may get certain people to agree that it is a good Budget because he balances it, balances ordinary normal current expenditure, by borrowing £2,000,000 and throwing on the future a load that we should dispense during the present year. A man cannot borrow for his breakfast every morning he gets up. That method of existence would soon come to an end. Borrowing may be all right if a farmer wants to build a house or a cowshed, but surely borrowing cannot be carried on year after year? The Government are borrowing £350,000 to relieve unemployment. They did the same last year and the year before. Do they expect that unemployment is going to come to an end this year and that we are going to have no unemployment problems in the future? Next year we shall have to provide for unemployment schemes also, and we shall have to bear in addition the burdens of this year, last year and the year before, as well as the burden for the coming year. That is the manner in which taxation has been piling up.

The one thing that has struck me about the Government's methods of solving the unemployment problem is that they have attempted to settle it wholly themselves. That is the worst possible method. It may be good politics, I suppose, to have a big percentage of our people feeding out of the Taoiseach's hands and feeling that they must rely for their very existence on Government sustenance, but it is bad financial policy and bad economic policy. The tendency is to develop that situation to an increasing degree. More and more people are coming to look for their bread, their very existence, to funds supplied by the Government. The increase in unemployment in this country over a period of years has been referred to by the Leader of the Opposition and other Deputies.

We have been told, and it has been admitted by the Minister, that the number put into employment last year amounted only to 1,000, whereas 9,000, 10,000 and 11,000 per annum were put into employment in the late Government's time. That is a serious situation. The explanation of that is that this whole system of economy is crippling private enterprise. The policy of any Government should be to promote private enterprise and private employment, which is the best possible source of all employment. It costs a good deal to raise the taxation by which the Government finances some of these employment schemes and further expense is incurred in distributing that taxation. Very often the schemes which they adopt are of no utility to the country. All the schemes are non-productive. The amount provided for the dole is £1,500,000, while a sum of £1,400,000 is provided for the Office of Public Works. Then something like £300,000 has to be contributed by the local authorities for minor relief schemes. Add to that the contributions made for housing, sewerage and water supplies and you have an enormous figure.

Some of these may be good social schemes but I want to point out that this method of providing employment constitutes an enormous drain on the resources of the country and it is work that is of a largely non-productive character. These schemes are purely palliative measures; they are no solution at all. We have no return for the money spent on them, no wealth is produced for the country by them. If an individual attempted to live on work of that character; if a farmer, for instance, attempted to live by clipping his hedges or repairing the gravel patches in front of his door and ignored the really essential farming work, he would not exist, as a self-supporting member of the community, for long. This country has been living on its fat for the last seven or eight years by schemes of that sort. We have never got down to brass tacks to find a real solution. I suppose we can continue to borrow and pile up debt. The Minister told us that the dead-weight debt of this country was £54,000,000 and that our gross capital liability at the present time was £100,000,000. Does that not represent an enormous increase in dead-weight debt for an infant State, a State that has been in existence for a few short years?

In that connection, we might consider the warning that has been given to the country by the Banking Commission. The Minister referred to the fact in his statement that the Banking Commission had expressed alarm at the ever-growing debt of the country. The Banking Commission report stated that "the growth of expenditure and the large and continuous expansion of the burden of dead-weight debt is one of the most serious matters which we are called on to review." They gave us figures as to the debt per head of the population in this country, a matter to which Deputy Childers might have referred and which might have explained why agricultural production in this country is not improving. In 1937 you had a debt in Denmark of £59,500,000, or £16 per head of the population. In 1937 our debt was £73,000,000, or £24 per head of the population. That £73,000,000 has now become £100,000,000, an increase of one-third, which means that the debt per head of the population is now £36. Sweden had a debt of £20 per head of the population, but it has no dead-weight charge. It is offset by productive funds. Austria in 1937 had a dead-weight debt of £21 per head of the population. Notwithstanding the grave warning of the Banking Commission at that time, we are going merrily on and we get a clap from the Fianna Fáil back benches because the Government keep steadily on with this system of increasing the dead-weight debt and dead-weight charges. Are we going to call a halt before it is too late or is the Minister going completely to ignore orthodox methods, to continue piling up dead-weight debt until the banking institutions say: "No, we are not going to provide you with any more facilities"? Will he then with his unorthodox methods start the printing presses going or what does he mean? Will the only alternative be the starting of some of these madcap schemes of social credit—some sort of currency manipulation? It is no wonder that you have a group of people in this country who were supporters of the present Government saying that, now that the great experiment has been a failure, they have come to the conclusion that it is our financial system that is wrong, and that if the system is wrong we shall have to go outside the system and create money.

I join with other Deputies in warning the Government of the danger towards which this country is heading. I agree with Deputy Childers that the situation is very serious, and that it is certainly time we should call a halt. I do not want the House to take it that I am opposed to the development of industry here, but an industry ought not to be started by simply ignoring the effects that it may have on agriculture. Before we start any industry we ought to see what effects, or bur den, any tariff imposed for the development of that particular industry throws on agriculture. If any serious burden is thrown on agriculture, that industry is not worth risking. We have put money into all kinds of experimental schemes on the system of trial by error. The Minister for Supplies said his policy was trial by elimination. We are not such a wealthy country that we can afford that system of elimination. We certainly have opportunities in this country. We have a market up against our door; we have a good climate and a fertile country. Our people are as intelligent as any other people, and can work the land as ably as any other people provided they get the necessary opportunity and assistance. I do not want to have them spoonfed, but they ought to be relieved of burdens that they cannot bear.

Take the Road Fund, for instance. The Minister, in referring to the Road Fund, said: "There is no more justification for appropriating the proceeds of taxation on motor vehicles for road improvement than there is, say, for appropriating the proceeds of the excise duty on beer to the improvement of publichouses." Is there any analogy between the two? Was the Minister trying to be funny? He would not be so funny if he lived down the country and was trying to pay poor rates at their present level. In effect, the Minister's proposal means robbing the ratepayers of £150,000 to get the Minister out of a difficulty so that he can say: "I have balanced my Budget by some sort of manipulation or other, but it is balanced anyway, and I have not to increase taxation." Actually it is increasing taxation in several directions. It is increasing taxation on the very people about whom Deputy Childers is worrying. Incidentally, Deputy Childers, when comparing agricultural production in this country and other countries, should tell the House what system of local taxation obtains in New Zealand, Denmark, and these other countries.

Are the farmers in these countries asked to bear the burden of providing social and medical services for the people to the same extent as we are doing here? The Deputy knows they are not. Even the people in Northern Ireland and the people across the water have not to do it. Not only are we asked to provide for these services at a very high cost, but this fund, which obviously ought to be spent on road maintenance and improvement, is raided by the Minister to balance his Budget. Nobody can deny that that burden of £150,000 is thrown back on to the people who are asked to come to the assistance of the country and step into the breach to save it.

I agree that there is an opportunity, at the present time, for this country, and that if we do not rehabilitate our agricultural community, improve their position economically and financially, and provide for them against the time of adversity, that, I agree with Deputy Childers, is bound to come after any great eruption, what will be the state of this country? Is everything being done that ought to be done to see that that great industry is at its best and that it will get every advantage to which it is entitled? It certainly has met with sufficient adversity during the past nine or ten years. Its interests have been long ignored. It has been sacrificed in the interests of other industries, many of which are not worth a button to this country. It is time that we wakened up to the necessity for giving this industry a chance of availing to the utmost of the opportunities that are there. That has not been done. I do not know whether it will be done or not. The Minister for Agriculture is supposed to be looking after our interests and making a good trade deal with our neighbours. Let us hope that his mission will prove successful.

That reminds me of one matter referred to by Deputy Childers, namely, our live-stock numbers. We are in the unfortunate position to-day that, although the Minister for Agriculture contends, after we have passed through an economic war, that our live-stock numbers have been maintained, in fact, when we examine the matter we find that they have not really been maintained, because we have in the country to-day mostly young, immature stock. I suggest that Deputy Childers should compare the number of three-year old bullocks with the number of yearlings we have to-day, and the relevant position to-day with what it was ten years ago. He will find that we have very young, immature stock, while there is a keen demand for aged, matured stock, forward condition stores, which can be finished in a very short time on the other side. We are in the unfortunate position that we are not able to supply the demand there is for that stock. I am sure Deputy Childers is very sincere and very anxious to help agriculture, but I advise him to beware of drawing wrong conclusions.

Is the Deputy questioning my figures?

I am not questioning your figures, but on listening I felt that the Deputy was inclined to blame our people for the state of affairs that at present exists. I deny that they are to blame. They proved during the great war and at any other time that the opportunity offered, that they would make full use of any chance given them. It is the Government's responsibility to see that the people can avail of the opportunities that offer now.

I do not want to take from the Minister any of the credit which he appears to have received in certain quarters for the Budget he has produced. He has been described in some places as a wizard of finance, inasmuch as he has converted what most people thought was a deficit of something near £2,000,000 into an eventual surplus of £4,000. When one looks at the White Paper that the Minister issued it would appear that when you sum it all up the Minister's effort was palpably simple. He solved the problem by a simpler method than any other Minister that preceded him thought of. He found himself in this position, that from tax and non-tax revenue on the existing scale, including the extra 1/- on income-tax, he had £33,718,000, with an estimated expenditure of £35,584,000, leaving a deficit of £1,866,000, and he proceeded in the shortest possible way to get rid of the deficit. He said he would borrow £1,194,000, lop off £600,000 for overestimation, and that that would leave him in the happy position of being only £72,000 short. All the manipulation he had to do then was in regard to that £72,000. I am rather surprised that the Minister did not take the easier way, by adding the £72,000 to the £1,194,000 he borrowed, but evidently he thought that something was due to the country, and that there should be a little by-play when producing the Budget, so he mentioned a few red herrings—if you like to put it that way —and said he was going to give the smoker something by taking a little off cheap leaf tobacco—which, incidentally, was put on last November—costing £120,000, which he proposed to find out of the Exchequer by deducting £125,000 from unemployment assistance.

The Minister also stated that he was going to give £100,000 to the farmers for fertilisers, but he is going to find that out of the Road Fund, and to leave himself with £50,000. The other £72,000 was to be got from wireless licences, a duty on cider, etc. In effect that is the Budget we are asked to debate. The whole transaction was simple. I have often wondered what has become of the 66-1 formula. It used to be said that our capacity for taxation in relation to people across the Channel was something in relation to 66-1. We have a Budget for the Central Fund and Supply Services amounting to £35,500,000 and if we—as we reasonably might—add some of the concealed taxes that do not readily reveal themselves, for instance the taxes on bread and beet sugar, I am not overstating the case when I say that we are taxed at least to the extent of £40,000,000, and that on the 66-1 basis, nobody could calculate what the British war taxes ought to be at present. They would not attempt to impose anything like that in the way of war taxes, so we can say R.I.P. to the 66-1 formula.

We have a Budget now of nearly £40,000,000 and the National Debt has been added to. We are passing on to posterity a great part of our expenditure. It might be a simple method of Governmental housekeeping to pass on some of the expenditure to those who come after us. I think the Government has been reckless, and has had very little regard for those who will come after us. In this generation we were lucky because we started with a clean sheet. Whatever argument there may have been as to the portion, if any, of the British National Debt that we ought to have borne, the fact remains that through the wise efforts of our pioneer statesmen, some of whom, I am glad to say, are still with us, we escaped any such liability, and commenced our career as a nation with a clear financial sheet. I suppose it is fair to say that the charge might be fairly laid, that we have so ill used our political and our financial freedom that it has become necessary to pass on an unfair portion of our expenditure to posterity.

I was rather interested in one reference of Deputy Childers in which he said that there would be a mental revolution amongst the people if there was not a change. I wish to say that there will be a mental revolution, such a revolution as would overtax the mental capacity of the people of this State, if there is not some change in the economic management of the affairs of the country. What has been wrong with us latterly is that we have failed to cut our coats according to the cloth. In fact, the Government during their term of office have been building up a garment that is too big for the material at their disposal. They have had to produce a many coloured garment, and have had to go away altogether from the ordinary rudiments of tailoring and the ordinary supply of material, in other words, the taxation that the country can reasonably afford to borrow and to raise.

Any individual citizen, if he proceeded on the lines on which the Government are proceeding, could live very happily for a number of years, but the reckoning would be sure. In my younger days I thought that, as a happy-go-lucky young man, I could compete with my richer brethren on a very small income. I proceeded on those lines, and I led a happy-go-lucky existence for four or five years. I held my head as high and spent as much as they did. But a crash came, and, like many another young fellow, I had to pull in my horns and start out for fresh fields. I learned a lesson from that, and I should like the Minister for Finance and the Government to learn a similar lesson.

It is just a flutter to him.

They fluttered to such an extent that they squandered first and then borrowed as a country relatively more than I, as a happy-go-lucky young fellow, had spent when sowing my wild oats. What is the cure for this? There must be a drastic reduction in taxation, whatever the consequence, or we must increase the income of the majority of the people. Alternatively, we shall have to borrow, and that alternative can only end in disaster and bankruptcy. I do not say that we are bankrupt, or that we are anywhere near bankruptcy, but I do say we are drifting in that direction. We started with a clean sheet, and, whatever may be said against the previous Government, they managed, to a large extent, to live within their income. Borrowings had to take place for certain matters which were beyond their control. I do not wish to go into these matters, because by doing so I might create ill-feeling, but the circumstances are within the memory of every Deputy. Exceptional circumstances made necessary expenditure which it was not unreasonable to pass on for payment by degrees. In the main, that Government managed to carry on without borrowing. We have had a departure from that practice in recent years. There has scarcely been a Budget within the last six or seven years in which borrowing was not resorted to.

Deputy Childers referred to imports and exports. I do not want to go into the question of imports, but the creation of a greater volume of exports is one of the ordinary requirements of prosperity. How is that to be done? Analogies have been drawn between the line of agriculture pursued here and in other countries. Such comparisons are false. We cannot compare our agriculture with that of Denmark, or even with that of New Zealand. We have different systems of agriculture. Our market varies to a greater extent than their markets vary. Deputy Childers may understand this question to a great extent, but he does not understand it as well as the ordinary farmer who is making his living out of agriculture.

I compared results, not methods.

I shall deal with results. The question of increased production has been referred to. I shall later come to the point whether you can increase production at all if production is not profitable. At any rate, an attempt was made to increase both production and quality. To the eternal credit of the late Minister for Agriculture, that was put in the forefront of his policy. No Deputy will deny that the late Mr. Hogan made greater efforts to improve the quality of the produce of Irish farmers than have been made by any succeeding Minister for Agriculture. I do not say that the present Minister for Agriculture has neglected his duty in that respect. He has mainly followed in the footsteps of the late Mr. Hogan. Mr. Hogan planned to increase the production and improve the quality of our produce, and he succeeded. The present Minister has been content to stand still at the point where Mr. Hogan left off. Everybody knows what Mr. Hogan did in regard to milk products, and in regard to the marketing and selling of our agricultural goods, and the improvement of our live stock. We have continued that highly satisfactory system which he developed, but we have not improved upon it, and the progress he was making has not been continued.

One of the foremost points in Deputy Hogan's policy was increased production. He defined his policy in a few simple words which any ordinary man or woman, ignorant or otherwise, could understand. He wanted the farmers to produce good stuff, and he made them do that by legislation. "One more cow, one more sow, and one more acre under the plough"—that was his motto. No Deputy has the right to say that an effort was never made to increase production, or to improve the quality of our agricultural goods. To the eternal credit of the man whose picture adorns the precincts of this House, that effort was made.

Perhaps our present circumstances have been brought about more by the unfortunate policy of the Government, political and otherwise, than in any other way. In regard to the financial dispute with Britain, as Deputy Childers and other Deputies have often pointed out, that had an unfortunate effect on the majority of our people. That economic war took something like £60,000,000 or £70,000,000 out of the pool of agriculture in this State, and you cannot take such a vast sum out of the pool of agriculture without creating something like, I will not say eternal disaster, but certainly a disaster that will leave its mark for many years. It will take the agricultural community many years to recoup the vast sum so ruthlessly taken out of the pool. It certainly did not leave them in a position to bear any increased burdens of taxation.

We have been taunted from the Labour Benches that no references have been made to unemployment. There was always unemployment in this country. There were efforts made to lessen it, not by artificial means, such as have been largely used by the present Government, but by a sane, sound, political and economic policy that gave a fair measure of prosperity to the general body of the people and, giving them that fair measure of prosperity, it enabled them to employ a reasonable number of workers. We did have unemployed, but we left office with a smaller number of unemployed than there have been here since. If one of the results of the heavy taxation that this country has had to bear since 1932—representing an increase from £25,000,000 to almost £40,000,000, apart from the added burden of the national debt, which will be passed on to posterity—had been to put the unemployed into profitable employment, then I, for one, would say that it was money well expended. But we have not had anything like that. Concurrently with this huge increase in taxation, and this huge increase in our national indebtedness, we have added, year by year, to the number of unemployed until it now reaches 120,000.

I think the number is 87,000.

That is largely due to the number of young unmarried men who have been knocked off in the summer months under the insurance system; that accounts for large numbers of them. A lot of these men are not employed. For reasons of expediency they have been simply knocked off the relief lists by the Government.

The grass is good.

Yes, the grass is good. They have taken them off the list and they have not been merged into employment. I say there are 120,000 and Deputy Childers says there are 87,000. Perhaps we are both right, because we can account for the difference. If it had not been for the great rush of work across the water at the moment, owing to the existing conditions, I could confidently say that our unemployed would to-day be in the region of 200,000, or perhaps 250,000.

Somebody to-day said that we sent 30,000 or 40,000 workers to England. I am satisfied that in the last five years we have sent nearer to 200,000, and they are still going as fast as they can get boats and passports. I do not know why they have selected me— perhaps they think I am a pro-Britisher or that I have some influence with the people across the water—but I frequently receive letters from young people, asking me to get them passports and jobs over the Channel. They are all anxious to go. That is one of the dire results of the Government's policy. That is a matter that should seriously be considered by people who have some regard for the eventual prosperity of this country. As an old man I have some regard for the yet unborn citizens of this State, the people who will eventually run the State. I have a desire to see this country passed on to them with something in the nature of the clean slate that was handed on to us after the settlement with Britain, when we had kicked Britain out.

Mr. Brennan

After we had whipped her out.

Perhaps I should not say that we kicked them out, but we got them out, anyhow.

We whipped them anyway.

Having got them out, we made such financial arrangements that we were able to start from scratch. We were not very good runners, most of us; we were not quick off the mark, but, inexperienced as we were, under the Cosgrave régime we managed to plod along fairly well without breaking records. We did not attempt to break records, to create any phenomenal reforms, but, considering the circumstances of the time, we can say that we did succeed in managing the affairs of the State fairly well. We were succeeded by gentlemen who were imbued with great ideas of reform and who possessed remarkable athletic prowess. Their idea was to get quickly off the mark. They got away before the gun, and landed us in the middle of the most disastrous conflict we ever had. It was a bloodless conflict, if you like—there were not any shots fired—but it was a much more disastrous conflict than any we had hitherto endured or that we are likely to endure for some years. It cost us relatively £60,000,000 or £70,000,000. It was necessary to increase our taxation for social services by some £5,000,000 or £6,000,000, and it was necessary to add to the unlimited millions of the national debt which will have to be paid by posterity.

The Minister told us he was knocking off £600,000 for over-estimation. I should have liked the Minister to knock off, as a start, £2,000,000 or £3,000,000 for needless expenditure, and I think he could do that. Desperate diseases require desperate remedies, and we have got a desperate disease. Every Deputy must accept that. I think even Deputy Childers will admit that we are in the early stages of a rather dangerous disease. We all hope, having got the danger signals in the way of pimples, that it will not develop into a deadly malady.

Perhaps it was the measles?

Yes, and we have got to attack it boldly. If we are going to save the country from this disease we have got to get a shears and lop off expenditure, no matter what the consequences. Else we have to create a bigger income for the people of the State. One is possible, the other scarcely possible at the moment. For various reasons I do not believe that it will be possible to create very much of an increase in the income of the agricultural community in the next four or five years. The prospects are not rosy. I am aware that in the Dublin markets the prices of live stock have gone up, but every effort is being made by our chief customers across the water to keep prices down to the minimum. I do not blame them. That is their policy and their business. They do not pretend to give us any more than they can and I see no reason why they should. Some of our people over whom we have no control have not been very kind to them.

On certain occasions some of our people did not help them. At all events, the fact remains that we are not going to get the best end of the deal. They will give us what they are compelled but no more. Apparently that is not going to be an extravagant price, certainly not a price that is going to give prosperity to the farmer if we take into account the great increase in his outgoings. We will only get what they like to give us. They set the price and we have to take it. We will have to bear a greatly increased burden for all the things we have to purchase. We will be more and more affected in this way as the war goes on.

Some Deputies have argued against the small increase in the wages paid to the agricultural workers during the last year or two. I do not agree with them. It puzzles me tremendously to know how some of those unfortunate men and women, if they have families, exist on the miserable wage they get. But it puzzles me much more to explain how some of the farmers who pay that miserable wage manage to pay it at all. I do not want now to enter into a debate on agricultural matters, nor into the various phases of agriculture, tillage, butter, milk and so on; there will be another time and place for that. I do think that every farmer ought to make the best effort possible to produce more these times and to produce a better article if he can. There are, I know, limitations to the power of the farmer to achieve these things. One limitation is through the want of capital. I am aware there are advances in the price of cattle, but there are numerous farmers whose lands are not half stocked and these people are not able to take advantage of the upper trend in prices, mainly because the Government in the last eight years took £60,000,000 out of the agricultural pool. That money has not been replaced.

As far as I can see, there is only one cure for this state of things at the moment. I should like to see the Minister having the courage to lop off —not the £600,000 that he takes off by way of over-estimation; £2,000,000 or £3,000,000 could be lopped off. Take the Department of Defence. I would very willingly vote for a shears to the extent of cutting £3,000,000 off Defence expenditure. I think that while the Army is desirable, it is not imperative for us to have it. It is imperative that the people of this country should be allowed to live in reasonable comfort with such taxation as they can comfortably afford. We are going to fight nobody. Nobody is going to attack us. If we were collaborating with anybody in attacking somebody else, then we might have some reason for a huge expenditure on the Army; but in the present position with no will to attack anybody and no desire on the part of other nations to attack us, I do hold that increasing expenditure on the Army is not justified. That is one of the items that can very well be lopped off. The time has come when there must be drastic reductions in expenditure. Otherwise we will rapidly drift in the direction of the dangerous malady that was rather suggested by Deputy Childers and others. That is into a financial breakdown. The symptoms are already there, but I hope we will not reach that stage. I hope that there will be sense enough on the part of this or some other Government not to tax the people beyond their capacity to bear it.

The only thing I can claim for this Budget is that there are no new taxes imposed now. I suppose it is because of that that the back-benchers of the Minister's Party applauded the financial statement. But this Budget had its forerunner in the Budget of last November, which imposed new taxation. If the Minister's backbenchers would reflect a little, perhaps they would see there is not so much room for applause after all. On going through the Minister's statement, I find that it was only through an accident that new taxes had not been imposed. It was because the Customs had yielded more by the 31st March than was anticipated, that new taxation was avoided. We have a little country like ours, in the midst of a war zone. We are in the midst of the greatest war the world has ever witnessed. If a country like ours contemplates living on the proceeds of Customs duties, then all I have to say is that it is leaning on a broken reed. The Minister expresses himself generally satisfied with the financial position. He said that in the last year he floated a loan which was highly successful.

I question that statement. It was not successful at all. It was successful because the banks were made to cough up. It was not successful inasmuch as the subscribing public did not contribute to it to the extent one would expect, or to the extent that would warrant the Minister saying it was successful; I do not think half of that loan was subscribed by the public. About the same period in which that loan was floated two of the chief municipalities in this country, Dublin and Cork, put issues on the market neither of which was subscribed by the public. Are these not sufficient warnings to the Minister and to the Government to ask himself what is wrong?

A prominent official in a public financial position lately expressed surprise that Irish investors will not invest their money freely at home, but that they will invest it in foreign countries. I have yet to meet the man who has money to invest that will refuse to invest it in a certain place through prejudice, or who will invest it in a certain place through sentiment. The investing public invest their money where they will find security and an adequate return for it. Is that not a warning to the Minister and the Government, that there is something wrong with the financial stability of this country when Irish investors will invest their money abroad? This country has always suffered from a malady which has driven capital out of the country. It is time for a native Government to diagnose and cure that malady. I think I would be right in saying that money running into millions, which the Government itself controls, was in the last 1½ years invested outside this country. Why? I do not know, but it was. A state of affairs which leaves the country in such an uncertain financial position, and so unattractive for the investment of money, is worthy of, and calls for, examination by the Minister. We may be suffering from the maladies imputed to us by Deputy Childers. May I congratulate the Deputy on the courage he showed in making the statement he did. He said it was not a political statement. I welcome it, but I do not welcome it as a political statement, for I do not take it as such. But, if the condition of affairs we have here is due to our own shortcomings, as Deputy Childers implied, then the sooner we set about finding out what those shortcomings are, and curing them, the better. High taxation must be one of the evils that has driven capital out of this country and that is keeping it out. The Minister knows that quite well. We have high taxation and high rates. In his Budget the Minister has shifted a burden, which properly belongs to the State, from his own door to the door of the local authorities. Why did he do that? In order to balance his Budget. In existing circumstances it is not good enough for the Minister to balance his Budget without new taxation.

A reduction in taxation is obviously necessary if this country is to carry on. We see evidence of that in the case of public issues by the Government and the principal municipalities—in their failure to attract the Irish investing public. But if we were, as all other free nations in the world are, standing on our own two legs, with the economic and trading resources of this country backing our note issue, that note issue would collapse, because the note issue in any country is the balance sheet of that country. Our note issue is being kept at a certain parity by Great Britain and does not reflect our financial or economic position. Deputy Childers touched lightly on that. I was waiting to see if he would develop that point, but he did not. I submit that the Minister has failed, when he has not reduced taxation, and I say that his Budget is a failure. He cannot point to any measure of prosperity which would indicate that the country was in a better position to meet the bill this year than last. If we were able to do that it would be equivalent to a reduction in taxation. In other words, if he were in a better position to meet the bill this year than last, the demand would not fall so heavily on us, but no one in this country, not even the Minister, has attempted to demonstrate that we will be able to do that.

The figures of unemployment are another danger signal. They are rising. We all know that at a certain season of the year rural workers are knocked off the employment register. If the Minister wants to know what the position is with regard to employment, apart from the official figures that are produced to him, I would ask him to come out and see the mail boat leaving Dun Laoghaire. If he does he will see the youth of this country leaving it, the youth who were to get employment at home, and not only the youth but the emigrants as well—those who were to be brought back to fill the jobs that Government policy was to make available for them. We now find that the youth are flying from the country. There is not a village in my constituency that has not sent dozens of young people over to England in the last few months. Some of them who were working with me a year ago are to-day in Narvik. If we are going to make this country a place worth living in we must reduce the load of taxation or increase prosperity. As the Minister has not done either, I submit that his Budget is a failure.

The Minister has again raided the Road Fund. When it was originally established it was to be for the purpose of improving the roads. There was to be a relationship between the taxes imposed on motor-vehicles using the roads and the wear and tear of the roads by those motor-vehicles. I am sorry that the Minister's Parliamentary Secretary is not in the House, because I remember listening to an address he delivered ten or 12 years ago. His theme was that there was full justification for imposing taxes on motor-vehicles to the extent, and only to the extent, that they were wearing the roads, and that the taxes paid in respect of their use should go to the upkeep of the roads.

I wonder what justification the Minister has for raiding the Road Fund to the extent of £150,000, and using that for general Government purposes. Whose loss is that, and at whose expense is it being done? At the local authorities' expense, of course; they should get that £150,000 for the maintenance of roads. In other words, he has helped to balance his Budget by pinching £150,000 out of the local ratepayers' pockets. That is really what it works out at.

I wonder on what principle the Minister justifies his borrowing for employment schemes. As a member of a local body, I have considerable knowledge of how those employment schemes work out, and I can quote at least one county surveyor. I think what he said would be said by all county surveyors; it is this: He would much rather that the money given to him for employment schemes were given out to the un-employed without any scheme, that it were given out for doing nothing, than burden him with the trouble of administering a scheme. The money put up by the local authority—that, and that alone—used with the ordinary county council staff, would give better results than that amount of money put into the pool with the Government grant to carry on an employment scheme under the conditions imposed by the Department of Local Government and Public Health. The money spent on employment schemes is an annual outlay, and there is no justification whatsoever for borrowing for them.

Deputy Childers' contribution to the debate was interesting from the agricultural standpoint. He gave figures which I accept, though I am not in a position to say whether they are right or not. I know that he has a flair and ability for statistical research and investigation, and I am quite satisfied that, before he quoted those figures in this House, he took every reasonable precaution about their accuracy; and, therefore, I accept them. Perhaps the Deputy would realise the significance of the statistics he gave about the use of artificial manures. He points out the small quantity, comparatively, used in this country. I would refer him to the time when the economic war was on, and when the fertility of this country—far from being renewed after or before crops, in order to provide a good yield—was destroyed. Some of the best land was utilised, through necessity, by its owners to grow the only crop which could be turned into cash—namely, wheat. Wheat, which extracts a lot of fertility out of the land, can only be grown in the best of times profitably on good land. The same land was called upon, for four or five years in succession, to grow crops of wheat, and in the end it was only fit for growing weeds.

The responsibility for that kind of agriculture must be laid at the door of the present Government. I think Deputy Childers supported that policy. It is a bit too late in the day for him to come and, wittingly or unwittingly, put the farmers of this country in the dock because they did not use as much artificial manure per acre as was used in other countries quoted by the Deputy. He should bear in mind that those countries using artificial manures were counselled to use them, were helped to use them, and that money was placed at their disposal to finance them to use them. Here the pockets of the farmers are being picked by the Government, which should be looking after their interests.

Furthermore, during that period another tax was put on agriculture— one which, normally, I would stand for. That tax was to help to build up the industrial arm of this country, in other words, it was tariffs. There was then a double tax—tariffs and the bearing of the brunt of the economic war. In other words, the British collected all the annuities and other charges from the farmers and our Government collected them too. There was a time during that period when they could not sell anything. There was no market. They were told: "That market is gone for ever, thank God." It is refreshing to read the Minister on that now. In his Budget statement he says: "This brings me to another point—the character of our export trade. The demand from our principal market may increase by direct war buying and by the withdrawal, in whole or in part, of other suppliers." The market that was gone "for ever, thank God," has now become our principal market. We are all glad that that mentality has been reached, but it is not fair to accuse the farmers of not adopting up-to-date methods—particularly in the matter of fertilising their land—when they are being plundered in this way.

Go a step further. What is the position regarding fertilisers now? £100,000 is given in this Budget to subsidise them. Speaking as a bit of a farmer myself, I would much rather see a bigger sum laid aside, £500,000, or £1,000,000 if you like—and it would be much more profitable to the nation—by way of an advance, that would be recouped to the Central Fund, for setting about even now to buy the raw phosphates, or whatever you may call them, in order to make superphosphates and to buy the ingredients and material for our fertilising factories so that we would be sure of a sufficient supply next year. Whether I get fertilisers at 10/- a ton less than the commercial price is of very little moment to me or to my fellow farmers if we find ourselves in the position that we cannot get them at all. It is much better to have the material at some price than to have it theoretically at a low price but, in fact, not to have it at all or not to have it in sufficient quantities. It is very doubtful farming economy—and I think that every farmer in the House will agree with me on this—to apply fertilisers to your land if you cannot apply them in adequate quantities. I would not go so far as to say that it is a waste, but it is next door to it.

Apart altogether from my general criticism of the Budget, I put it to the Minister as a suggestion that something should be done by way of providing funds for the purchase of the raw materials necessary for the production of fertilisers. There is a very rich firm that is handling that business in this country, but I really think that, in a national emergency like the present, money could not be invested in a more productive enterprise. As far as any benefits as a result of this £100,000 would accrue to me—and this year I purchased about 100 tons, and at 10/- that would be £50—I would willingly hand that £50 back to the Government in exchange for a guarantee that I would get my required quota next year, if I am alive. I think that every farmer would willingly forfeit whatever benefit there would be to himself in this £100,000 in order to get that guarantee, and I am quite satisfied that if you guarantee the farmer and the farm labourer fair conditions, you need not be afraid of a food shortage unless the elements go against us, and you will find that no political prejudice or otherwise will interfere in that because it becomes the interest of the farming community to produce when they get the materials of production. I would strongly suggest to the Minister for Finance that he should make inquiries in this matter, and if he or the appropriate Minister is not satisfied, and satisfied beyond doubt, that sufficient raw materials for fertilisers are not in this country, and if they can be procured, the Minister for Finance should see to it that the question of money to purchase an adequate supply should not stand in the way, and I think I am speaking to a Minister who, in my experience, has always been sympathetic to a project of that kind, whether in connection with manures or anything else.

Now, I am certainly not one of those who call a reasonable price for agricultural produce a tax on the community. I say, without apology or equivocation, that I stand four-square behind the Government's wheat policy. This country stands for a protectionist policy for industry, and if industry is going to be protected—and I believe it should be protected—as a burden, if you like, on agriculture, then agriculture is entitled to its quid pro quo for that protectionist policy. In my view that protectionist policy—not of a tax, not of a tariff, but of requiring a certain percentage of home-grown wheat, the grist for making flour in this country, even though it renders it a bit dearer to the consumer—gives agriculture a chance to carry on.

Further, I say that it is a decided national advantage for us to have hundreds of thousands of acres under wheat during this war so that the people of this country, especially the delicate, the sick, the infirm and the youngsters, will not have to eat the black, stinking bread that we had to eat during the last war. I remember, during the latter years of the last war, that the only place that I got bread that was any good to eat was in jail; the bread that you got outside was not fit to eat. The farmers of this country during this war are in the position, and are anxious and willing, to do their part to save the people of this country from having to eat black bread. I think that that is a decided national advantage, and it has my wholehearted support at any rate.

I also support anything that promotes tillage. My view on agriculture is, that if tillage is not a paying proposition then the problem is to make it pay. I hold that we are not justified in scrapping tillage merely because it is not a paying proposition. The problem is there: Why is it not a paying proposition? It is for our Government, and for the whole people of this country, to concentrate on that problem, and make tillage a paying proposition. I should like to see more attention given to the practical side of agriculture by the Government. In all I have had to say up to the present on the Budget I have condemned the expenditure— the extravagance, if you like—and I should like to see it reduced, but there is one item that I should like to see increased in the Estimates for this year, and that is the subsidy for the Faculty of Agriculture in the university. We shall never succeed—and I am speaking with both theoretical and practical knowledge—we shall never succeed as a farming community here until we first succeed in the laboratory. We shall never succeed as a wheat-growing country until we produce a wheat that is suitable to our soil and climate. No country in the world has done it, and we cannot do what no other country could do. In the case of the best wheatlands in the world at the present time, when they were first sown with wheat, the wheat was a failure— I point to Canada, California and Australia. The first time that wheat was grown successfully in Canada, it was grown by David Fife, who bred wheat suitable to his farm, and to the climate of that farm. He gave his name to that famous Canadian wheat, Red Fife, which in a few years covered 15,000,000 acres of Canada, and which exhausted all the soil of Canada that could grow wheat properly. It took a long time to mature, as the climate was against it, and Canada wanted a quick-maturing wheat that could be put in the ground late in the Spring, and that would mature early in the harvest.

That was bred and added another 20,000,000 acres to the wheat-growing area of Canada. We would want to do something like that. I could give several examples in California, Siberia, and different provinces of Australia, but nobody who has studied the wheat problem will contradict what I am saying because they probably know it better than I do. I was a member of an agricultural committee in University College when this faculty was set up. I was at the setting up of it. I am a member of that committee still. I am afraid I am not a good attendant but I did my best to get a professorship for the plant breeding——

The Deputy might reserve some of these remarks for the Estimates for Agriculture and Education.

Yes. Perhaps they would be more appropriate there but the question of wheat growing was criticised.

Quite, but it is a different matter to discuss different types of wheat and to detail their development. Such details would arise more properly on an Estimate.

Yes. In saying that, I was just making a general statement to justify my advocacy of increased expenditure on that particular heading— the Faculty of Agriculture. I pass away from it now. Deputy Childers in speaking about our competitors, explained how their production had increased. He asked various questions —was it due to so-and-so, was it due to money policy? I refer him to Denmark and New Zealand and I say without fear of contradiction that the prosperity of the Danish farmers and the New Zealand farmers and the advantage they held over the farmers of this country in the British market were entirely due to money policy.

The Deputy, if he has studied the money history of the last 20 years, is aware that the first knock that agriculture received in this country, during our time, was the rapid deflation policy of Winston Churchill, then Chancellor of the Exchequer, from October, 1919 to 1925, when we returned to the gold standard, but during that deflationary period the Danish Government, though it deflated its currency, kept well behind the British deflation, which always gave the Danish farmer an advantage of 25 per cent. in the competitive market in England against the Irish farmer. He is aware that about five or ten years ago New Zealand adopted its own currency but, though it linked the currency to sterling, it had not the same parity with sterling. It was 25 per cent. less. That gave the New Zealand farmer a 25 per cent. advantage over us in the British market. I do not want to develop that any further, but the Deputy will find that those facts are correct as regards the money policy being different. Whether I am justified in deducing from that the results that I claim is another matter. I do not ask the Deputy to accept that, but he will accept, I am sure, that there was a difference in our standard of values the result of which was to give an advantage to those two countries. That is all I ask him to accept.

I suppose the question of the danger of a shortage of accessories for agricultural implements would be more appropriately directed to the Minister for Supplies. I suppose the Minister for Finance would be open to provide the money if the Minister for Supplies has a case made. I just want to say that there is a danger of these accessories becoming scarce. I was looking for tractor implements quite recently and I was strongly advised to get in a stock. I hope the Minister will not raid me and distribute them around if I have the money to get in the stock.

You will not fall short in that, anyhow.

I am glad I have got that from the Minister for Finance. There is no danger of falling short now. I am not competent to say, but I just wonder is it a sound policy nationally for us here to be shouting "Keep down agricultural prices"? The Minister in his Budget statement said we should increase exports. That, of course, means increase our agricultural production in order to have exports. Is it not a very foolish man who has anything to sell who will shout about keeping down the price of that article? Why should we be shouting about keeping down the price of agricultural produce, cattle, sheep, pigs, potatoes, etc? I sell a good deal of them and I would be the last man to say, "Keep down the price." Why should we not try to have those prices as high as possible? Does not it mean more money coming in for the same amount of goods exported? I hope the Minister will not say that the higher a man goes up the tree the bigger the fall he will get when the crash comes.

We have all experienced that.

Yes, but we would all like to go up the tree even higher the next time and we would chance the fall.

I leave that to the Deputy.

You need not pass the Minister.

The Deputy will feel the fall worse than anyone.

Perhaps I am a bit heavier than when I got the last fall— in avoirdupois, not in pocket. I might suffer more from it. Is it not bad business for us, an agricultural country? We can adjust the home market if it is necessary to adjust it, but is it not very foolish for us to send our wares over to England and to say, "We must keep down the price because we are afraid when the aftermath of the war comes the crash will be too big"? Can we not be wise in time? Let us get as much as we can for our produce now and when the crash comes, the better we have our pockets lined, the sounder our banking account, the better we will be able to bear the crash.

We are to be well upholstered for the fall?

The fall will not be too hard if the banking account is sound. Nothing will save the fall but the banking account and the big stocking. I am afraid the Government is inclined to that policy of keeping down agricultural prices. If you measure the price of agricultural produce at the present time against the wage that has Government or semi-Government sanction, that is paid to agricultural workers, and if it is correct that agriculture is not able to pay any higher wage, is not there something wrong in the whole national economy? Agriculture is the one industry which is the pillar of the whole nation, and through taxing it the secondary industries are brought into existence and maintained. Yet every one of them pays a better wage than the main national agricultural industry. Is not there something wrong? How will you improve the capacity of that industry to pay a wage? There is only one way: by increasing the price of the produce of these workers. Why does such a howl go up against the price of agricultural produce, the price of food stuffs, and from people who have twice the wage of the farmer? If he says: "I will not work unless I get £3 or £4 a week," what will pay it? Agricultural produce must go up, and I wonder if our Ministers, in their trade talks on the other side, are insisting on getting adequate prices for our agricultural produce?

That matter hardly arises for debate now.

On their work there will depend, to a great extent, whether the Minister will get the money he expects this year.

There will be opportunities at a later date for raising and discussing these negotiations.

I said at the beginning that this Budget will not fall heavily, if the Minister could show that our income was going to increase, and the answer to the question as to whether this is a fair and just Budget depends entirely on our capacity to pay. If our capacity is increased, this is a light Budget; if our capacity remains stationary—if it is worsened, of course the whole position is worse still—this Budget, in view of what similar taxation has produced in the year just concluded, is too expensive, the burden of taxation is too great, and we should have had a reduction in taxation.

Our entire income from external sources, apart from foreign investments, comes from agriculture, and if prices are arranged which are not remunerative and if we have to pay more for what we import—everything the farmer has to buy is gone up; some of the things he cannot get, but everything he can get has gone up in price —and if Britain is going to charge us increased prices for her manufactured goods which we get in here, it justifies an increase in price for agricultural produce. I do not know if England is taking advantage of the position in which we are at present, namely, that we have nowhere else to sell. Another factor which makes the position precarious for us is that our stuff is not bought here. It must be landed across the water, and it is then bought, and we must take all the risks of the crossing. That is very unfair and I do not think we should agree to it.

There is a very large item in the Estimates in respect of unemployment. Can nothing be done by way of giving employment to those who are unemployed? I saw a picture the other day of a number of young fellows going down to cut turf. Would it not be better to cut turf than to do nothing? Would we not save a good deal in our coal bill? I believe—and I have this from coal people—that not only has the price of coal gone up but coal merchants here have got a warning that there may be a shortage. Why should we be paying people for doing nothing when we have thousands of acres of bog land where turf could be cut? Even in this period of emergency, if it would not be a business proposition for them to cut turf, it would represent some return for the money they get to maintain them, and I think the matter should be developed during this emergency.

I never thought that a very profitable commercial industry would be made out of turf. I know the business; I have worked at it and I know the whole job from beginning to end. I know also that it pays nobody to cut and rear turf, that its only advantage is that it comes at a time of the year when the men on the farm have nothing else to do, and would do nothing else, if they did not cut and save turf. As a commercial proposition, however, it is a different matter. We have thousands of people idle and they must get, and are getting, maintenance.

It represents a big item for which there is no return. Why, during the summer months, can they not be put on to cutting and saving turf? Why cannot men be put on land reclamation? There are thousands of acres of rocky and swampy land that could be reclaimed. Normally, that would not pay a commercial rate, but when we are paying men for doing nothing, it is a different matter. Whatever work they do is done for nothing because they are being paid in any case, and it would reduce the burden both on the taxpayer and on the ratepayer.

I saw in the public Press some time ago that 60 per cent. of the munitions for the Japanese armed forces are imported from America. Japan is at war, but nobody accuses the United States of being anti-Chinese—quite the opposite—but for sound commercial reasons, America made munitions of war and sold them to Japan. Why should we not start munition factories here and sell munitions to whomever will buy them? It would not infringe our neutrality. If England wants them, let her buy them; if Germany can send a boat over here, we will fill it for her, and our neutrality is preserved. Would it not be better to do that than to have thousands of fellows polishing the corners? I think we should get down to it because no man should get money without earning it.

That would be about the most nonpolitical policy that any Government or any Party could adopt, and they would find it the one policy in which they would get the greatest volume of support throughout the country, because not only will it bring in a monetary or material return, but it will train young fellows, growing from boyhood to manhood, to work and there are thousands of them in this country who never worked and who, if they do not get a chance of working soon, will never work. If, in a small, thinly-populated country like this, we have a large proportion of work-shys there is no hope for the country, and I think it the duty of both the central and local administrations to see to it that for whatever money is paid out in the way of assistance through the labour exchanges by the Government and in home assistance by the local authorities, some service should be rendered.

There is another serious aspect of this matter, and one to which in our young days we paid a good deal of lip service, that is emigration. "Our young people, the life-blood of the country, are emigrating"—the Minister will remember what use we made of that phrase against the generation of politicians that preceded us, the use we made of the millions who had emigrated in the twenty or thirty years prior to that period. Since then we have got a native Government here, and I do not think the position has been any better. I see them every evening crowding the mail boat at Dun Laoghaire on their way to England— boys and girls. You see them going from Amiens Street to Belfast on their way to work in Britain, and when they go there they have to join up for national service—and they are joining up. I am not speaking either for or against their doing that, but they are leaving this country because they cannot get work here.

I am certainly dissatisfied with the Budget. Unless the Minister, when he is closing the debate, can hold out some prospect of better times in the future, unless he can assure us that he is ready to place money at the disposal of the people in order to build up reserves of raw materials to keep our industries, both primary and secondary, going during the general world war, then this Budget is something that this country cannot bear, and the expenditure which it proposes is on a scale that should not be countenanced because of the artificiality of depending so much on imports. If our imports are cut down, where are we? Is there not a possibility of that? Look at the trend of the war. This State is neutral, and I am not going to talk about the war from any angle, but look at the turn it has taken. Could we imagine that, in our lifetime, a country without any fleet could invade another maritime country in spite of the British and French Navies, and clear these Navies away? How do we know what is going to happen around these shores? How do we know that our imports can be maintained? If there are no imports, £10,000,000 in revenue is going to disappear overnight. What is going to replace that? We have been talking glibly of social services, and of maintaining all sorts of high standards, but if commerce to and from this country is checked what have we left? What will replace the £10,000,000 revenue which we now receive in customs?

I think the position is very serious, and that the Minister should set about cutting the Estimates so as to reduce expenditure and provide for that contingency. He has admitted in his Budget statement that he underestimated the produce of his Supplementary Budget, and that what gave him the most pleasant surprise was the revenue derived from customs duties. He got that pleasant surprise because he feared that the war would have taken a course that would have limited our imports. That limitation may come at any time. We do not know when general naval warfare may start. We do not know when general aerial warfare may start, and if and when it does, it will seriously affect our commerce. When our commerce is affected our revenue will be affected. A shortage of revenue means either a reduction in the obligations which the Government have undertaken, or an increase of taxation. It will be for the Government to decide which course to follow, and whoever will be the unfortunate individual who will then have to look after the finances of this country, I am sure his lot will not be an enviable one. I think he will need, and I am sure he will have, the support of all of us.

This is not the real Budget; the real Budget was introduced six months ago. It was a rather adroit move on the part of the Minister responsible for its introduction to have then imposed many elements of new taxation, together with the accumulated taxes which had accrued in previous Budgets introduced by the previous Minister. I have no hesitation in saying that while the Budget introduced yesterday was a colourless one, at the same time it holds all the hidden poison that accumulated taxation of previous years had administered to a country ill-fitted to bear it. I remember when the Budget of six months ago was introduced, I rather cheerfully taunted a member of a minority in this country who had voted for placing the present Government in power with the fact that an increase in income tax had been imposed to an extent that he probably would have felt unbearable. The answer he made was that the one thing he had feared was borrowing, and that while the imposition of a tax of 6/6 in the £ meant a severe strain on the resources of people in his position, borrowing would be a greater evil and one that this country could not afford to face. Yet we find the Minister providing for additional borrowing to the extent of £2,000,000. This may perhaps not hurt us immediately, but it is going to be a very harassing factor in the future life of this country. I feel that is one of the aspects of the Budget which we are justified in opposing.

Owing to the control of the prices in England and the control in every way of agricultural exports from this country, we might have hoped that some relief would be afforded in this Budget for agriculture. Bearing in mind that there has been an accumulation of hidden taxes imposed on agricultural requirements, requirements which are absolutely necessary if the policy of the Government in regard to tillage is to be carried out, we might justifiably have looked forward to some remission in taxation or some other form of relief for agriculture. Agriculture has not responded to the slight increase in prices because the taxes which the agricultural community have to meet, whether by way of local taxation or national taxation, are bearing very heavily upon them. One of the speakers from these benches has commented on the fact that the burden placed on the agricultural community has had its reactions upon the traders in the small towns in the country as well as upon the agricultural labourer. A member on the Labour Benches asked what was the cause. I think I might answer that question by saying that it was caused by the fact that the Government Party were faithfully followed into the Government Lobbies by the Labour Party and that they were thus able to place all these impositions on the agricultural community during the economic war and the agricultural community went down before them. The largest farmers in the country have been reduced to such a state that in many cases they are unable to pay their rates, their annuities or the instalments on the loans which they had received from the Agricultural Credit Corporation. These men are certainly not producing on their lands now half of what the land could produce. They are unable to take advantage of the schemes for the purchase of manures and they are unable to get the necessary implements or the necessary seeds in many cases. In many places local bodies like the Cork County Council have had to give unlimited credit to these men who are in a state of absolute penury and who cannot get credit from shopkeepers. What must the Minister for Local Government think when he sees the huge number of farmers who are asking the local authorities, to whom they are supposed to pay ever-increasing rates, to safeguard their credit with the local shopkeepers who will not give any extra credit to these people? People who were always credit worthy are now unable to get credit from the shopkeepers who at one time trusted them.

That is a matter which should have the serious consideration of the Minister for Finance. He should seriously consider the impositions that he is placing on a community that at one time were a great source of wealth in this country but who to-day, in spite of legislation which has been passed, are unable to produce the necessary products on their lands to any appreciable extent. Is there any greater economic tragedy than the fact that so many sons and daughters of farmers are emigrating and leaving behind the aged parents and perhaps the most unsuitable member of the family to carry on the farms? At one time agricultural education was a thing to be eagerly sought after, but agricultural education is useless unless you have the means to carry on the production which it is the policy of the Government to encourage, but which is retarded by the burden which the agricultural community have to bear.

We should take into serious consideration the position in which the agricultural community are placed by the ever-increasing rates. The Cork County Council this year struck a higher rate than was ever struck by a county authority. The greatest burden imposed on the farmer is that imposed by the demand note. It is a burden that he cannot bear. He must be relieved of that by a policy of de-rating or else there will be an increasing amount of arrears of rates due to the local authorities. In addition, the farmers have to bear extra taxation and higher costs of production. These are all matters which should be considered and relief given to the farmers.

The Minister has taken very great credit to himself for the money which he is providing to help in the purchase of artificial manures. The need for agricultural manures cannot be met by the amount given by the Minister. That sum will not help the farmers, unless the Government are prepared to go the whole hog by reducing the costs of production. The demand for artificial manures at present is enormous and there is a great difficulty in getting them. At the same time the farmer needs a large supply of feeding stuffs. Yet licences were refused to farmers who were in a position to purchase maize and who had their own mills to grind it.

Under the last Budget the Minister increased the duty on spirits. But, owing to the increased taxation, the revenue from spirits is down by £185,000. That increased duty has hit very seriously a distillery at Midleton, in my constituency, which at one time was working full time, and employed a large number of men. That distillery now only works for a few weeks at a time. The same thing applies to the breweries. While the Minister has given some relief by way of rebate to our small breweries, they have already been taxed almost out of existence. These taxes again have seriously crippled the agricultural industry in the barley growing districts, such as the one in which I live. While we welcome this relief given to the small breweries, there is no question that the position brought about by this taxation is a serious one for the tillage farmer. Wheat growing, to a certain extent, has taken the place of barley growing in these tillage districts, but the wheat growing policy has raised the cost of living for the residents in our cities and towns.

Some of our largest farmers have been compelled, owing to the lack of stock, to run out their lands completely by tillage production, and they have not the necessary means to restore them, as they have not the necessary stock to make the manure. Agricultural education has been referred to, but we certainly are not in a position to avail ourselves of it if we have not the necessary capital to carry on agricultural economies. I think I voice the opinion of the agricultural community when I say that their demand is to be left alone to carry on their work in the manner in which they were taught by their fathers, and to be provided with an open market for their produce, and an open market for the purchase of their requirements. If the Government are prepared to do that, I venture to say that they will come off better in the end. We have had milk boards set up, and we have the extraordinary position that contracts for the supply of milk are refused to farmers, who do not belong to these milk boards, whose tenders were the lowest. Farmers who have offered to supply milk at a much lower figure than others have been refused contracts because they were not members of these milk boards. That is a striking blow at the agricultural community.

There is one serious item that perhaps has been ignored, and that is the high shipping freights to this country. In England shipping is subsidised, and the English farmer is able to get his requirements at a much lower figure than we are in this country. We have this amazing state of affairs, that the freight on a ship coming to the City of Cork with a cargo is equal to the value of the cargo. That is not a position that is going to help this country. It is one that should claim the attention of those who have taken upon themselves the task of controlling its finances. We have to bear in mind the position of the unemployed and the position on the home front. The Minister rather glibly mentioned in his Budget statement that he has taken £150,000 from the Road Fund. His words are:

"One justification for this course is that a considerable portion of the provision in the employment schemes estimate is spent on road works. Last year, for instance, approximately £800,000 was sanctioned for rural and urban road works, to be financed from the Employment Schemes Vote. It is only reasonable, therefore, that the Road Fund should not be entirely relieved of responsibility for this heavy outlay on road works, and £150,000 may be regarded as a somewhat inadequate contribution towards such outlay."

The fact is that the Minister has taken that £150,000 when unemployment is greatest. A sum of £100,000 is also taken from unemployment schemes. It is rather a serious matter when the Minister, apparently, is balancing his Budget by such means. I feel that if the Minister is going to depend on taxation, which is now the highest that has ever been imposed here, he will have to remove from those who are producing the greatest store of wealth, the agricultural community, the impositions which they are now bearing.

I approach consideration of this Budget from the point of view of a person entirely unversed in the technique of finance, and look at it from the point of view of the average citizen who hardly knows the effect of the phrase, "balancing the Budget." I do not propose, therefore, to enter into any detailed examination of the masses of figures put before the country in the speech made by the Minister when introducing the Budget. I wish merely to refer to two or three topics, two of which are of paramount importance to the general community, and one of which is of particular importance to a section of the community. We have reached the stage now when the introduction of an unbalanced Budget is regarded as a commonplace. At least four out of five of the last Budgets that were introduced by the present Government have been unbalanced, and it is rather a striking commentary on the outlook of the people that the only thing they have been able to say as a result of the statement made by the Minister for Finance yesterday is that at least it is a good thing that there appears to be no additional taxation. A sigh of relief has gone up because additional taxation has not to any great extent been put on. The burdens have become so heavy and the people have really become so accustomed to bearing them, that they are relieved to find that they are not going to be heavier still. One crumb of comfort can possibly be taken from the Minister's statement when he said that the Government recognised that there was a limit to the taxation that even a Fianna Fáil Government could put upon the people. At last, after eight years, it is useful to know that the Government realises that there is a limit to the taxation which can be put upon the people. It is a small matter for congratulation that these are the only crumbs that can be got out of the present Budget.

I want to say a few words on behalf of the income-tax payers in this country. They have for years past been the prey of the Minister for Finance in Budget after Budget, The number of income-tax payers here is comparatively small and, from the point of view of their voting capacity, they are negligible to a Government and a Party whose policy and whose existence depend on votes. But I think it is time that the Minister for Finance and the Government should seriously consider the intolerable burden placed upon income-tax payers by the imposition of an income-tax of 6/6 in the £. We, while congratulating ourselves on being one of the few neutral countries that have escaped the really serious effects of the war have now an income-tax which falls very little short of the income-tax paid in Great Britain at a time when Great Britain is facing almost intolerable burdens in an effort to prosecute the most difficult and most perilous war in her history, when she is fighting for her existence and when, judging by the evidence before us, everybody is prepared to make any and every sacrifice.

I think it has been the excuse of the Government that such a high rate of income-tax is occasioned by matters arising out of the present war. When things are properly analysed it will really be seen that the present high rate of income-tax here is caused entirely by the policy that has been pursued by the present Government over seven years, prior to the commencement of the present conflagration in Europe. The rate of income-tax we have to pay now has very little relation to the situation created by the present war and by the emergency in Europe, but is entirely traceable to the kind of policy pursued in the last eight years, a policy which has brought us at least four unbalanced Budgets, and which has brought us to the position that every member of the community, rich and poor, is taxed beyond his capacity. It has often been said that income-tax is the fairest tax. Possibly that is an argument that might bear analysis in ordinary circumstances, but when you find income-tax payers for the last eight years having to pay far greater sums in proportion to their earnings than is justified by the results that have been obtained in the spending of the money extracted from them, the argument that income-tax is the fairest tax ceases to have any relevance.

It is, of course, an easy matter to take out of the pockets of those people who earn their money a tax collectable in the way income tax is collected. It is an easy matter for people to say: "Tax the rich," but the effect of such taxation, even on a matter of vital importance such as unemployment, has not been properly realised. The burden of income-tax on people who have to earn their livelihood has become so intolerable that every class of the community who earn incomes on which tax is collectable have had to retrench, and will have to retrench still further. I think it was the present Minister for Finance, or the Taoiseach, who said, on the introduction of the emergency Budget last year, that it was something in the nature of a patriotic duty for all citizens to spend as much as they could in the emergency, so that unemployment would not become a greater menace than it was. It would be quite impossible, with the rate of income-tax as it is, for any person to spend money on anything except what is absolutely essential. The idea of thrift will be banished from the minds of the people if the idea is that the more you earn the more is taken from you, that you have to retrench in order to pay taxes, the produce of which is to be thrown into the sea. There will, in these circumstances, be no impetus to thrift, and there will be nothing to recompense a person for the payment to the State of money which he would have been prepared to spend in the exercise of the patriotic duty referred to in the debate on last year's Budget. The only thing to do will be to get rid of the money in the easiest and most luxurious fashion possible.

The Minister for Finance, in his Budget statement, took pride that he was able, by the doing of a certain sum almost amounting to arithmetical gymnastics, to point to the fact that in the Budget proposals for the present year a sum of £8,383,000 represented the contribution of the Government to the solution of the problem of unemployment. I regard, as I think most people must regard, the problem of unemployment as one of the most pressing problems facing the country as a whole. It is easy for people making speeches to say that it is the duty of the Government to spend more and more money on unemployment relief, unemployment schemes, and in giving employment, that it is the duty of the Government to have some sort of ordered policy or plan for the solution of unemployment. The days when any Government, in this country at all events, could produce in the manner the present Government said they could produce eight years ago, a readymade plan for ending unemployment have gone for ever.

When I speak on the subject of unemployment, I speak with all sincerity. I do not speak in the mood of throwing at the Government their alleged plan for the solution of unemployment which appeared in their famous plan in 1932 and 1933. I think that the last Minister for Finance had the courage to say on several occasions that there was no plan for the solution of unemployment. While there cannot be said to be any ready-made plan for the solution of unemployment, the paramount duty of every class of the community is to bend its energies and unite in order to solve the present terrible condition in which we find ourselves in the matter of unemployment at the end of eight years of the present Government. The sum of £8,383,000 is supposed to represent the contribution of the Government to the solution of the unemployment problem. It is a sorry story to tell that with that colossal sum which the Government proposes to spend in the relief of unemployment, we are facing this year greater unemployment than ever. The menace of unemployment is more menacing than ever, and there is less chance of even palliating the evils of this very serious problem. Presumably, a corresponding sum to this sum of £8,383,000 was spent during the last three or four years. Notwithstanding that figures have been produced and proved showing that in the last five years of Deputy Cosgrave's Government, more people were put into gainful occupation than were so put during the corresponding five-year period of the present Government, despite this vast expenditure of money.

The expenditure of these sums of money may, possibly, palliate the evil of unemployment. They may give employment, direct or indirect, but no money spent on the relief of unemployment can give real or lasting results unless some tangible asset is produced in return for it. As I said, I speak with all sincerity on this subject. I believe that in the conditions existing in the world, the impact of which must be, and is being, felt in our own country feelings of unrest must be produced amongst the unemployed that will cause many grave reactions on the stability of any State, including our own State. The Taoiseach yesterday found himself in the position of making an appeal over the radio to the people to support him in the restoration of ordered conditions. I believe that a great deal of the disorder in the country is due to the existence of unemployment. From my own experience of people coming to me trying to get work, I believe that the vast majority of unemployed people are, in all sincerity, anxious to get any sort of employment. The cancer that eats into them through idleness day after day creates in them such a feeling of revolutionary unrest—almost hatred of the existing order—that there is no knowing to what lengths they may ultimately be driven. From the point of view of restoring ordered conditions it is the prime essential that every possible effort should be made to find some method of relieving unemployment in the course of the coming year.

It is no answer to say that £8,000,000 can be extracted by arithmetical gymnastics from the Estimates and that this sum has been passed by the Dáil. No real results have been achieved or will be achieved from the expenditure of these vast sums. The only effect will be a minor palliation of the evil. The vast amount of money extracted from the pockets of private taxpayers might more properly be spent by these individuals in giving employment by private enterprise. As it is, they are forced to retrench and cut down the employment formerly given by them. The high rate of income-tax has a very serious repercussion on this vital problem of unemployment. An individual who has to give one-third of his income to the State for all sorts of extravagances and to bolster up schemes which have produced no real, tangible or lasting asset finds that he cannot maintain even the employment previously given in his own private business or in his own household. The result is that each individual has to do without one particular workman or one particular servant or, perhaps, two more that they might keep on if the income-tax was not so high.

The income-tax is collected and spent in a vast variety of ways that produce no result except in increasing taxation and increasing unemployment. The expenditure that is to be made this year will have no other effect than to mortgage the future and to leave the position of the unemployed far worse at the end of it, notwithstanding all this vast expenditure, than it is even at the present time. It had been hoped that from the experience gained in the last few months some retrenchments or economies might have been made. It was dangled before the eyes of the taxpayers last year, when the emergency Budget was introduced, that an economy committee was sitting, in regard to which there were great expectations; if not great expectations, at least expectations of some real and lasting cutting down of extravagant expenditure. Instead of that we find the position to be this, that the Minister, in his opening statement yesterday, says that he feels that it is not possible for any such economies to be achieved. He gives no reasons why, except one, which is a mere vote-catching reason.

He gives us no explanation of the work of the economy committee or no indication of what their recommendations are. He gives no opportunity to the House to say that this recommendation ought to have been carried out, that that recommendation could have been carried out, or possibly this other recommendation might eat into old age pensions or unemployment assistance and, therefore, should not be carried out in the present circumstances. In two or three lines the Minister dismisses the work of this economy committee, merely stating that he had come to the conclusion that it would eat into the social services and for that reason was not necessary. Every time economy is demanded, at every stage when extravagant expenditure is protested against, one answer is given by every member of the Government, and there is the following chorus from the Fianna Fáil Party. That answer is that if you reduce expenditure or effect economies you will be doing it at the expense of the social services. That cry has been shown to be false so frequently that it is not necessary to repeat it.

Social services include old age pensions and unemployment assistance. The poor want work rather than unemployment assistance. I think economy in public administration would be far more beneficial than any social service you can possibly have. It is a great sign in a country that social services are well looked after, a sign that all parties desire to look after the old and infirm and the workless. But it would be a far better sign for the prosperity of the country and for the future of the country if the Minister for Finance could say: "We require less money this year for unemployment assistance; we require less for employment schemes; we require less money to hand out for road work on this, that or the other scheme, because of the fact that there is more work being given; the wheels of industry are working more smoothly and, consequently, our social services, while we maintained them when we had to maintain them, can now be reduced; we are now in a position to reduce them."

Instead of the Minister for Finance trying to pretend that the Vote for the Stationery Office, for the Public Works Department, for the construction of national schools, for the Gárdaí, the Army, for A.R.P. shelters, and all the other Votes that he added to make the £8,300,000, that, he said, was a good contribution by the Government to the unemployment situation, it would be a more healthy sign if he could say to us: "Our industry is such, our social scheme is such, under the policy pursued by this Government, that we require less for unemployment assistance and less for employment schemes."

Although I do not wish in any matters I have to say on this question of unemployment to leave myself open to the charge of merely playing politics, I cannot pass this question by without saying this, that much of the £8,300,000 in so far as part of it is represented by money that went in assisting employment, was used indirectly for the purpose of bolstering up the political fortunes of the Fianna Fáil Party. We have had experience of the working of Fianna Fáil political clubs in the country getting employment for the political supporters of the Government in power. I think that many of those schemes have been thought out and devised rather with a view to the effect that they will have upon a general election or a bye-election than what effect they will have upon a permanent solution of the general unemployment situation, and the proof of that lies in the fact that with all the money expended in the last eight years, the unemployment situation is worse now than ever it was, and the only prospect that is held out is that it will possibly get even much worse in the future.

We have a situation where the principal officer of the Department of Finance, speaking to a gathering of civil servants and discussing with them the necessity for inflicting upon them a greater sacrifice than any other section of the community is called upon to bear in existing circumstances, stated that the financial position of the country is sufficiently disquieting, and that expenditure for the year ended on 31st March exceeded revenue by over £2,000,000. That was a statement made, I am sure, carefully, a statement made with due deliberation.

The officer in question was representing the Minister for Finance at this conference, and he was putting to them the decision of the Government, which has been conveyed to the country in the Minister's speech to-day, that the bonus of the civil servants was to be stabilised. He took care to say that the disquieting financial situation of the country was not the primary reason for the Government's decision. He did say, and I quote his words:

"You are aware that the position is sufficiently disquieting. In spite of increased taxation, including that which was imposed in the Supplementary Budget last November, expenditure for the year ended 31st March exceeded revenue by over £2,000,000."

That situation is possibly not revealed in all its crude and naked truth in the Minister's statement that he read here yesterday. But it is well for the country to know that that is the position, that £8,300,000 are being claimed as the sum that is being spent as the contribution of the Government out of the taxpayers' pockets to unemployment relief, unemployment solution and to the employment position. It is well that they should recognise that all that has been a failure so far as the unemployment position is concerned, and it is well, therefore, that something should be done to reverse the policy which has brought about that position. There must be something wrong with expenditure here, or the means by which expenditure is being directed if that is the situation.

I said that I wished to make some general comments on matters affecting the general community, and one particular section of the community. The matters to which I have referred, the high rate of income-tax and its effects on the general community and on a particular section of the general community, the income-tax payers, are very much affected by the unemployment problem, as are, perhaps, all classes and sections of the community. But the stabilisation of the bonus adumbrated in the Minister's statement affects vitally one class, small it may appear, of the community. And I find myself once again in the course of a few years protesting against an injustice to the Civil Service of this State. In his Supplementary Budget statement last November the Minister said:

"The Government felt that it was incumbent upon it to set its face against the efforts of any class of the community to obtain compensation for the rise in prices at the expense of the community."

That is the statement which is supposed to furnish justification for the stabilisation of the Civil Service bonus.

The Government wants to set its face against the efforts of any class of the community to obtain compensation for the rise in prices at the expense of the community. Why select one class of the community? Was that phrase of the Minister's, given in his last year's Supplementary Budget and repeated in this year's Budget statement, directed solely at one class of the community, or was it to be of general application to all workers as well as to State servants?

There has been growing up for some little time past a notion that a number of industrial disputes, strikes, lock-outs and demands for increased payments, the dislocation of trade and the things that result from these disputes might possibly be alleviated if the principle of the cost-of-living bonus was applied in the matter of the workers' wages. I understand that principle has been successfully applied in some industries here in this country. There has, I understand, been a growing tendency in industry and amongst the workers to apply the principle of the cost-of-living bonus to these industrial disputes. It is felt that the principle of the cost-of-living bonus is a sound one. It has been decided by one of our courts that the cost-of-living bonus is a mere device to relate the actual salary or wages to the cost of living as it exists from time to time. The very name, cost-of-living bonus, carries its own justification.

I think at this time it is improper, however expedient it may be from the point of view of the Minister for Finance sorely pressed with an unbalanced Budget, to balance his unbalanced Budget by a raid on the pockets of State civil servants. It is a bad time for him to come to this decision, at the time when there was some hope that the cost-of-living bonus principle might be applied in the adjustment of wages generally, and so alleviate the distress and dislocation caused by industrial disputes, strikes, lock-outs, and the dislocation caused by these disputes generally. The Minister has, however, taken that decision, and he has taken that decision after having promised the civil servants that he would consult with them or their representatives before such a decision was made. He carried out that promise merely in a formal way, presenting the representatives of the civil servants with an accomplished fact, presenting them with that decision and asking for their approval.

The cost-of-living bonus of civil servants was based upon an agreement between the Civil Service organisation and the State. It has been judicially decided that the relationship between the State servants and the State is one of contract or statutory obligation. It is extraordinary at the very moment when that decision has been given in our courts, and not appealed from,— and until it is set aside by a superior court it is the law of this country— that the Minister should seek to set it aside. We have therefore the position now that the relationship between the Civil Service and the State is a statutory one. Civil servants who have entered the service of the State since the establishment of the State have done so under a contract and a statutory obligation founded on contract.

When a person proposes to enter the Civil Service he does so as a result of an intimation conveyed to him either by document or advertisement. It has been the invariable practice when the person is sitting for the examination to set forth the salary, cost-of-living bonus—indicating the precise amount of the cost-of-living bonus which would obtain. When he is received into the Civil Service he is received on the basis of that offer made to him on behalf of the State. He enters into agreement with the State that he will serve for a basic salary and the cost-of-living bonus. That is a contract complete in law under statutory obligations. It is proposed now so far as the Civil Service is concerned in the case of those with Treaty rights and those who have not those rights to set aside that contract.

I do not know what means the Minister proposes to adopt in order to carry that decision into full effect. There are two classes of State servants who would be affected by this decision. One class of servants have Treaty rights. The other is a class who have entered into the State service since the establishment of the State. We had experience shortly after the present Government got into power of cuts in the salaries of the civil servants and we know, therefore, the large amount of money that that particular decision following the cutting of salaries has cost the taxpayers of this country in giving compensation under Article 10 of the Treaty. Those civil servants who were entitled to retire by reason of the inroads by the Government on their rights, retired presumably under these Treaty rights which are now set aside unilaterally. Does the Minister hope to have some further moneys extracted from the pockets of the taxpayers by the stabilisation of the bonus? I warn the Minister that that proposal to stabilise the bonus will cost in the first year £150,000.

Where is the economy going to come in when that is taken into account as well as the cost of those who retire under Article 10 of the Treaty? I assume, in the absence of any indication to the contrary, that Treaty rights will not be affected in any way. The Minister must, of course, remember that it has been decided judicially that any cut in salary, including the cost-of-living bonus, is an infringement on Treaty rights. It is, therefore, clear that the present proposal is an infringement on Treaty rights. It is an infringement on constitutional rights as well as on Treaty rights, because those rights, which were originally based on Article 10 of the Treaty, have been put into the Constitution. As a constitutional right, the State servant was entitled to Treaty rights before the enactment of the Constitution. As regards the inroad that is proposed to be made on the statutory and contractual right of every State servant, we have had a sufficient example of the complete disregard by the Government of those contractual rights to have any hope that those rights will be in any way sanctified, or have any proper consideration from the present Government. At all events, we have left to us the right to protest in this House against those inroads upon contractual rights.

We have had the experience of having a general election fought nominally upon the defeat of the Government upon a matter affecting civil servants. We remember the vilification of State servants that was indulged in by members of the present Government during the course of that campaign. I do not wish to rake these things up again, but I think it is grossly unfair to try to get it over to the people that the servants of the State are in a peculiarly privileged position, and that the sacrifice which is being demanded of them is not what the chief officer in the Department of Finance told the representatives of civil servants when he entered into this co-called consultation with them—a demand to take special sacrifices or burdens upon themselves in the interests of the State in a moment of emergency. That was put forward by the Minister for Finance in his Budget statement as a mere step in equality of sacrifice for all. The statement made by the chief officer of the Department of Finance was not put upon the basis of equality of sacrifice. It was put upon this basis, that State servants were asked in the present emergency to make a special contribution in view of their special situation to the financial stability of the State.

If State servants are to be asked to make special sacrifices in special circumstances, let a case be made for that, but it is false pretences, it is a blinding of the ordinary people of the country who have been sufficiently blinded over the past eight or ten years by the vile propaganda that went on in Fianna Fáil circles about salaries and pensions, to say that this proposal to stabilise the bonus is merely asking civil servants to make equal sacrifices with all other classes of the community. They are asked to make special sacrifices. It is on equality of sacrifice that the present Minister for Finance has put his case for the stabilisation of the bonus. That in my view, and I think it is beyond controversy, is an untenable case. The vast majority of civil servants are lowly-paid officials who have to bear the brunt of every tax that has been put upon the people in the last eight years by the present Government. Now a special section of the community is being asked to bear an additional tax in breach, first of all, of Treaty and Constitutional rights, and, secondly, in breach of contractual and statutory rights. The case that is being made of equality of sacrifice is a false case. If a case is to be made for special sacrifices on the part of a special section of the community, let that be justified, if it can be justified, on special grounds.

The Minister for Finance, in his statement yesterday, made the case that State servants were in some way in a special position. He rather hinted that they were trying to get away with something that the general taxpayer was not going to stand for. The ordinary person in the country, and particularly the poor farmer and the small farmer, has been poisoned in his mind and outlook by the propaganda carried on by the Fianna Fáil Party for many years about the big salaries that civil servants and Ministers were getting. That cry has since been admitted by the present Government to have been a wrong cry, a false cry, and an untenable cry. Before they got into power we all remember how they decried the last Government for the salaries they were taking at the expense of the poor farmers and of how they were raking the pockets of the poor for their own advantage. When this Government got into power they were put in this humiliating position, that they had to go to the country and confess that they were wrong in what they had said.

I admire them for confessing that they were wrong, but now they are proposing to do something which can find its only justification and excuse in the country by an appeal to a similar kind of poisonous propaganda. I think it is entirely regrettable that such a case should be made. Civil servants are in the same position as any other class in the community. They enjoy no special privileges. In the course of the debate on the 1933 proposals of alleged economy, in answer to the statement that the country could not afford to pay salaries on the scale that they were being paid, I made the statement then, and I repeat it now, that the ordinary people of this country, so far from not being able to pay decent salaries to hardworking officials who have given loyal service to successive Governments in this country, must sooner or later wake up to the fact that they cannot afford to underpay servants of the State.

I have stood repeatedly for the rights of civil servants. I, at least, can make the case here that I have a mandate from my constituency to speak on behalf of civil servants. Every effort was made in my constituency during the last election to vilify civil servants. Every effort was made to deprive me of my seat in that constituency because of the stand I took on behalf of civil servants. But I was returned at the last general election and, therefore, I claim that I am entitled to stand up here and say that I, at least, have a mandate from my constituents to speak on behalf of civil servants, and I am doing so. I want it, however, to be clearly understood that I am doing that, not in the interests of any section of the community and, above all, not in the interests of bureaucracy, but in the interests of the general good of the community, in the interests of the general good of the taxpayers who have to bear the cost of the Civil Service. I want to see develop here a State service which will be efficient, small and properly paid, a service that will not be run on bureaucratic lines, a service in which there will be less red tape and more loyal service and more hard work than will be got from the pursuit of the kind of policy insisted on since the present Government came into office.

I think it will be admitted—in fact it has been admitted—that civil servants have given good service to this State, service that no money could buy, during the last 20 years, in building up the State and in building up the institutions of the State. I think it is unjust to single them out now on the cry of "equality of sacrifice." That is a false case to make. The plea that a special contribution must be made in the present emergency is a false one. If any special contribution has to be made by income-tax payers, if any special contribution has to be made by civil servants under the present conditions, those sacrifices are not demanded by the war; they are not demanded by our neutrality or by world conditions, but are the direct and inevitable result of the policy pursued over the last eight years by the Fianna Fáil Government. In every single respect their policy proved in effect, in reality and in working to be an absolute failure.

The taxpayer of this country has been made pay very dearly for the failures of the present Government. The income-tax payer is paying 6/6 in the £, not because of the war but because of Government policy. The working man pays taxes upon his tobacco, bread and other foodstuffs not on account of the war, not on account of the restrictions upon imports but on account of the results of the failure of Government policy, on account of their efforts to try to justify at the expense of the taxpayer something which could not be justified. When that is realised —as I think it has been pretty fully realised throughout the country—when it is realised that democracy rests upon efficiency and when we are able to educate our own democracy in this country to the position where they will vote, not to get pecuniary advantage from any Government at the expense of the taxpayer but to get efficient service, loyal work and a good return for their money, then there will be some hope of ending the unemployment problem.

Efforts have been made to make this Budget appear to be a very good one. It is, however, a very hopeless one from the point of view of every citizen. Just before the Budget was introduced, there was a war scare that there would be a frightful rise, especially in the cost of the commodities the people were using, and it has been a great victory for the new Minister for Finance that there was not. Any ordinary, sane, sensible man can understand that the Budget is as bad as it could possibly be, in the way it is affecting every citizen. We have had six or seven years of a definitely consistent rise in taxation. That came immediately after we were told that the people previously in government were a pack of robbers and scoundrels, who had no respect for the ordinary people and who, with the help of the civil servants, were plundering the country. One would imagine that, at least after one or two years, people would have got a little common sense. They did not; two years—six years—went by, and now there is only a faint ray of hope on the horizon that the people on the opposite benches— and especially the Government—have come to some kind of sensibility, that they have come to realise the country cannot carry on as it has been carrying on.

They are trying to make all kinds of excuses. Deputy Costello has referred to the outcry which arose, especially two years ago, that the civil servants were costing too much. The Minister now suggests stabilising the Civil Service bonus at 85 points. I wonder if he thinks this war is going to last for ever. Does he think this is going to help the country financially? What will happen when the war is over, when there may be a frightful depression? Then the cost of living bonus would not go down to 65. The labourer in the country would be very badly off, but the civil servant would still be entitled to the bonus at 85, if it is kept stabilised for all future Governments. Is it intended to change it at some future date? Deputy Costello has said he believes that civil servants are entitled to decent salaries, but outside of that we have £8,000,000 for social services and £10,000,000 or £11,000,000 for farmers. Does the Minister himself for a moment believe that the poor people entitled to the £8,000,000 and the farmers entitled to the £10,000,000 are getting those sums? I cannot understand how people are so badly off in the country if they are getting that money. The Government cannot deny that the agricultural community is badly off; they cannot deny that the ordinary labourer in rural Ireland—and the labourer in Dublin, too—is pretty badly off. If all this money set out here is going to them, nobody should be badly off—they should be doing well.

We heard a speech from Deputy Childers this evening, which I very much admired and which I thought was a rather good and sensible speech; but it seemed to me that the Minister did not like it, and that the previous Minister for Finance did not like it either. It would have been a better speech had he not gone too far to try to cover up the blunders and foolishness which occurred during the past six or seven years. He was trying to get his speech over from 1922 to the present day. I agree with a lot of what he said, as I agree with what he said on Sunday last—there should not be a lot of people in this country trying to disrupt this State under and behind salaries and pensions obtained from the Government.

What is the reason for the high cost of the Army? I wonder if the Minister himself has any idea? Nine or ten years ago he was telling us that the cost of the Army was too high. If that is so, why has he been building up an Army—especially one in which most of its members are unreliable, from the point of view of the Government—for the past year or two? Why is an extra £1,000,000 or £2,000,000 being spent on building up that Army, without being definitely certain that that Army is going to be used in defence of the State? We have been told that we are in a difficult position here. Surely, with the impoverished state of the country, this should not be necessary at all. The Minister and the Government should be dead certain that the Army is going to be a useful instrument so far as the State is concerned, internally, and especially internally because of the trouble at the moment. The trouble is internal, in the minds of the Ministers, just as it is internal in my mind, and as far as the mind of every Deputy on the Fianna Fáil side is concerned there is not a Deputy on that side of the House who is seriously concerned about the international situation or as to the question of who is going to invade this country, and I do not believe for a moment that there is anything in what we are told as to the war developing on the western side to such an extent that there is a likelihood of invasion here, but of course this has been made a great excuse for expenditure on the Army.

You have a very big number of men in the Army, and I believe that it is a complete waste of money When the raid was made on the Magazine Fort, for instance, all Gárda barracks all over the country, even as far as 100 miles and more away from Dublin, were notified of the raid and instructed to hold up cars and lorries and search them, while the military got no such notification. That was a lovely thing to have happen—that a Gárdaí barracks should get notification and that the Gárdaí should be instructed to go out and hold up and search lorries, while a military station, with all its soldiers and equipment, got no notification whatever.

Getting away from that matter, however, we have the boast being made by Ministers opposite that industries are being built up here—and, of course, they are—but still our export trade has been getting smaller, and we find that we have nothing to sell except agricultural produce. With the exception of agricultural produce, we have nothing to export, except Guinness' stout and a few other small items. Yet, you are building up a number of other industries that are not giving any greater employment than was given before you came into power. There has been no rise in employment since then. What is the position in regard to all our industries, including agriculture, which is the principal industry? Take all the industries, including agriculture, combined, and what is the position? The position is that you are mulcting agriculture in a terrible impost in order to keep these other industries going and you are having men, day after day, disemployed or put out of employment in agriculture. The Minister cannot get over the fact that dozens of his industries throughout the country are kept going in order to supply the wants of the household in the agricultural industry— in order to supply the machinery of the agricultural industry, from the brush or the candle that is in use in the house, to the spade, shovel and fork that is in use in the yard, and the machine in the field. These industries supply nobody else, and before you bolstered up these industries, the agricultural industry was buying the stuff at at least two-thirds of the price, or even less, and in many cases at less than half the price.

Instead of fostering the one real industry that you have, agriculture— the one industry that is going to keep the country going—you are setting up a lot of these other industries and making that principal industry of agriculture pay for the others.

Of course, I suppose it will be said that I am against the setting up of industries. I certainly am not. I should love to see dozens of industries of all kinds set up here, but let not an industry be set up here that is going to hurt and even kill our principal industry. Let us not set up industries in a haphazard fashion, here, there and the other place, and let us not make one blunder and then, in order to rectify that blunder, make another one. That is the position. From the brush or the candle in the kitchen, to the fork or shovel in the yard, and the machine in the field, an extra price is being heaped on the back of agriculture. Every sensible man and every business man in the country knows that, and everybody who is not merely out to play politics will admit it. The Minister himself knows it now, and I am glad that both he and his predecessor in the Ministry of Finance have admitted it. They have admitted at different meetings and dinners that they have attended that agriculture is the principal industry of this country. Why, then, kill that industry by setting up a lot of other industries merely to placate their supporters and, thereby, place the whole burden on the back of agriculture? That is really what has happened. Mind you, even with the burden of taxation that is upon us, we could bear it, if there were an ordinary sane and sensible administration, and while, perhaps, you are getting back to sanity, God knows, there is one thing that you surely ought to be certain about, and that is that you cannot continue increasing our dead-weight debt, year after year, and especially during the present years when there is some hope that we shall be able to make some money. This is a time when we should be hoping to get out of debt, and you should not go on increasing that debt. Why should we not be preparing to meet a leaner time later on? I am afraid, however, that while you are satisfied and certain about the economic truth, you have not yet made up your minds to save this country from economic ruin.

There is no Minister or Deputy on the other side, who has any contact with the Land Commission, the Agricultural Credit Corporation, or the various Departments concerned, who does not know the position fairly well; and while, perhaps, 50 per cent. of the people in rural Ireland who are engaged in agriculture and in business are doing well at the moment, or rather beginning to do pretty well, there must be nearly 50 per cent. more who cannot do well because of the position in which they have found themselves after six years of maladministration. There is a hope now that, if you decrease, or at least do not increase, the overhead expenses of the agricultural industry, we may be able to survive, because, when this war is over, it is not 30 per cent. or 50 per cent. of the agricultural community that we are going to have almost bankrupt, but 75 per cent., and that in a very short time, unless something is done to safeguard the position. All these other little industries that you have set up will not save you from ruin. There is not a hope of these industries saving you from ruin. I suppose that, in 25 per cent. of the industries that the Minister boasts about as having been set up through the country, 50 per cent. of the people employed in them are little girls.

That is not so.

I say it is.

I say it is not.

I say it is true with regard to 25 per cent. of these industries.

I say it is not. I know what I am talking about now, and the Deputy does not.

I do know what I am talking about, and even in Dublin—

The Deputy is talking there for the last hour and a half and nobody knows what he is talking about.

At any rate, these industries are not going to save the country. The Minister has made a few changes in import duties and these few changes are going to cost some householders something here and there. They are trifling changes, according to the Minister, but they are going to be more costly. The one thing we must remember, however, is that agriculture is our principal industry in this country. I do not want to press the matter too much, and I should like to see other industries going on here as well.

I move to report progress.

Progress reported; the Committee to sit again to-morrow.
The Dáil adjourned at 10.30 p.m. until Friday, 10th May, at 10.30 a.m.
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